Search and Save: Google’s Rocky Road, Promo Overload, and Amazon’s Declining AOV

In a world full of constantly changing technology and information, this monthly newsletter keeps marketers up-to-date on the latest trends that will impact their business. I hope you enjoy it!

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I'm releasing this newsletter a tad early as I'm about to embark on a nice long holiday with my family. I truly hope to disconnect from the world of media news. I hope you enjoy it!???

Let's kick it off with some of the recent news on Google.

A federal judge rules that Goole is officially a monopoly.? Anyone who works in the media could have told you that.? I mean, we call Meta and Google the duopoly.? Regardless, it is official, but the implications are still not known. ? The most significant immediate effect is that it could force Google to pull back its stronghold and provide other competitors an opportunity to capitalize on its weak position.? For marketers, it does not inherently change anything, but it does mean that diversification in Search is essential.? Bing is set to be the biggest winner here, so keep your eyes on your marketing mix and devote slightly more attention to your non-Google search platforms, search budgets, and budget splits.? This is not the only Google-related news, and this recent ruling is just one of the thorns on the side of Google.??

Let's talk about the other things bothering Google right now.

1. OpenAI officially launched SearchGPT. OpenAI hopes to steal market share and announced it's testing SearchGPT, a prototype AI search engine designed to challenge Google's dominance. Given that Search is responsible for more than half of Google's Q2 earnings, Google should be rigthly concerned.? Despite this news, it will likely take years for SearchGPT to steal meaningful market share; however, it is a critical point in a broader trend where consumers are diversifying where, when, and how they search. Google is still the top destination for search spending, and Google will account for about 70% of US traditional search spending in 2026.? Despite Google's dominance in the foreseeable future, Competitors like Perplexity and ChatGPT are making significant inroads, and Gartner predicts a 25% reduction in traditional search volume by 2026 due to the rise of AI chatbots and virtual agents.
2. The rise of social Search.? In addition to the rise of AI and chatbots stealing market share from traditional Search, social is also becoming a place where consumers begin their searches. On average, 10% of people start their brand searches on social media, refining searches on search engines later.??

1. Amazon has become THE place to start product searches.? Amazon has already beaten out Google regarding where people start their searches, with almost 60% of consumers beginning on Amazon compared to 40%(ish) starting on search engines. Having already chipped away at Google's dominance, the dollars have officially started following.? US retail media search ad spending is rising by double digits over the next four years to reach $76.83 billion. Non-retail media (traditional) search ad spending is on the decline, growing less than 1.0% in 2028,

For brands, you must ensure a holistic, organic, and paid search presence on all channels (Search Engine, AI, or Social) where consumers research your brand and category. As consumers increasingly turn to channels outside Google to do product research, brands must ensure they can engage and optimize their presence in all places where research occurs. This approach will help capture a broader audience and mitigate the risks associated with overreliance on a single search platform.

Amazon missed quarterly sales expectations in Q2 despite hosting various smaller sales events to spur spending and an all-out push to speed up delivery to keep its low-cost competitors at bay.? Sales still rose 10% year over year, but they said that the miss resulted from more consumers opting for cheaper products, which led to a lower average selling price.? Amazon has held at least six sales events this year—including Prime Day—to drive consumer spending and boost awareness of its Prime offering.? While consumers are increasingly fixated on price, Amazon's competitive advantage is fulfillment, which they believe is crucial in attracting shoppers and getting them to spend more. With this in mind, Amazon announced it hit its fastest Prime delivery speeds ever so far this year, with more than 5 billion items arriving the same or the next day globally—an increase of more than 30% YoY. While that is interesting, Amazon is more of an ad business than it is a seller of goods, so as expected, Amazon's advertising unit grew the fastest of all its divisions—up 20% YoY.? Amazon's initiative to insert ads into Prime Video helped drive some of this growth.? They also said they are planning to innovate more in the advertising department in the future.? Today, sponsored product listings drive most of Amazon's ad revenue, but that could change as they increasingly focus on their video advertising unit.? Amazon said they are most excited about allowing brands to connect video ads to business outcomes.? For sellers, knowing that Amazon is moving to video first should not surprise anyone as it's very closely mimicking the transformation on most other media channels. Still, with the declining average price, sellers should consider optimizing prices and focusing on product mixes that appeal to this more price-sensitive customer.? Keep a close eye on performance changes and changes in consumer behavior as you plan your investment in Amazon.

Amazon also announced it's partnered with TikTok and Pinterest to let users of those social platforms buy from Amazon without ever leaving the app. Amazon has been trying to expand its reach, and a partnership with TikTok and Pinterest, where so much product discovery and influence happens, is a great opportunity. This integration enhances the convenience of shopping, with 64% of Gen Z/Millennials saying social media is their main source of inspiration when looking for items to buy. It also taps into impulse buying behaviors, which are often triggered by social media content, with 64% of Gen Z/Millennials saying they would be more likely to buy items they discover on social media if they could purchase directly in the app. For marketers, this could be a big unlock as one of the challenges of selling on Amazon is being beholden to only advertising on Amazon, and if you do spend your dollars elsewhere, attribution is not your friend. So now, being able to expand your reach and have very simple attribution, you should expect to see more Amazon sellers putting their dollars into these two platforms. This is a must test.

Consumers wanting lower prices is not just an Amazon phenomenon but a broader marketing trend. In a competitive market, online brands and retailers have significantly increased the use of promo codes to attract customers, according to SimplyCodes. They found that, on average, retailers issued nine unique codes — an increase of 31%. Promo codes are more plentiful this year and offer more significant discounts, with the average discount being 17.6%, up 2.6% from last year's 17.17%. Additionally, the average dollar amount per promo code has increased by 22%, rising from $27.26 to $33.25. There is a growing reliance on these incentives by both consumers and retailers amid competition and economic factors such as inflation and cost of living. Nearly 70% of Americans say having promotional codes makes them more inclined to purchase.? For marketers, I'm sure hearing that promo codes work is not necessarily a big reveal, especially for consumers struggling to make ends meet.? However, marketers need to ensure we take a strategic approach to promotion codes to maintain profitability.? Keep a close eye on LTV to ensure it's not affected by consumers brought in by promo codes. Also, in a sea of $10 off, how do you make your $10 off offer stand out?? Unique and eye-catching promotions can make a difference, as simply offering a discount does not guarantee consumer engagement.??

For example Amazon's Subscribe & Save program lost share across nine of the top 10 consumer packaged goods (CPG) categories between 2023 and 2024. This decline suggests that consumers are cautious about spending, opting to pause subscriptions and seek the best deals. The typical Amazon Subscribe & Save discount of 5% is no longer sufficient for many consumers, who prefer waiting for more significant sales.

The other two earnings reports I was tracking was Meta, which reported a more robust Q2 than most other platforms, up 22% year-over-year, and the fourth consecutive quarter of over 20% growth.? Ad impressions delivered across the Facebook and Instagram ecosystem increased 10% year over year, while the average price-per-ad was also up 10%. Meta's earnings indicate the overall health of the industry and its continued duopoly status.? For all of our talk of diversification into TikTok, Reddit, Snap, etc, Meta has found a way to reign supreme.? The other was in the CTV space.? CTV was a resounding success in Q2, showing increased advertiser adoption and spending.? Roku's revenues were up by 14%, adding 2 million streaming households, and Netflix also saw 17% revenue growth.? Netflix said that a significant contributor to this growth is its ad-supported tier, which grew by 34% QoQ and now represents over 45% of new sign-ups.

Additionally, Netflix has been increasingly focused on new and more innovative formats, including "pause" ad campaigns, and has formed programmatic advertising partnerships with Magnite, The Trade Desk, and Google DV 360 to allow ease of activation.? For brands, I hope it's becoming increasingly clear that CTV is a huge opportunity to reach engaged audiences.? The ease of buying and new, more engaging ad units are something all brands should explore.??

Netflix is also not sleeping in the video game space.? On the same earnings call, it announced that it has 80 titles in development and plans to launch a new one each month. Consumers are starting to spend more time playing video games, and Netflix wants to cash in on the craze. A recent study asked Gen Z what their favorite entertainment activity was. Watching TV shows or movies came in last for Gen Z, while playing video games came in first, followed by social media and music.? In addition to Gen Z spending more time playing video games, that time spent may only increase. ? A recent study showed that gamers spent just under eight-and-a-half hours a week playing games, a 14 percent increase over 2020 that shows these users are only getting more engaged, and as they do so, brands are prioritizing platforms that reach gamers and GenZ like Twitch. Netflix's increased focus on games may allow marketers to have new opportunities to engage audiences through in-game advertising and branded content and enable advertisers to reach a broader and younger audience. Netflix's integration of games with its shows and movies offers unique cross-promotional opportunities, allowing marketers to create more cohesive and engaging campaigns.? If reaching gamers is a priority, it makes sense to keep an eye on what Netflix does in this space.??

Reddit is also increasing its investment into AI to enable ease and advertiser adoption by acquiring Memorable AI, a creative testing startup that specializes in tailoring ad creative based on an advertiser's previous campaign KPIs.? Reddit, which has been making some real gains in the advertising space, recently added 8.5 million users in Q2 and increased revenue by 54%, which they attributed to its growing ad capabilities and more prominent focus on SMBs. So, already in growth mode, they hope this new acquisition and AI puts them in a better position to compete with the other social platforms, all of which have launched AI creative and optimization tools.? I like Reddit for many reasons, but if it's out of reach due to bandwidth constraints, keep an eye on some new features that will make it easier to test this new platform.? Outside enabling ease, they are also introducing new ad formats like Lead Gen ads on Reddit, now in Beta, allowing businesses to collect leads from Reddit audiences without leaving the platform.?Finally,?they recently struck licensing deals with the NFL, NBA, and MLB.? Reddit will host highlights and behind-the-scenes videos from these leagues on its platform and sell ads alongside the content.? All in all, Reddit continues increasing content to gain more users and will ensure brands can spend to capture the micro-communities they are cultivating.??

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Check out my Podcast, where we discuss back-to-school, the impact of the upcoming election, and financially strapped consumers. You can watch or listen here.

Megan Conahan is a 19-year veteran of the digital marketing industry. Over the last 19 years, she's consulted with Fortune 1000 brands on negotiating the ever-changing demands of the digital marketplace and creating unique solutions to set them apart. Megan is an EVP at Direct Agents, an independent and minority-owned digital marketing agency. If you want to chat about marketing support or just talk shop, please message me or email [email protected]!